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Online video ads growing rapidly

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Online video advertising is proliferating at a fast clip. Online video ad spending in the U.S. is expected to grow to $3.0 billion in 2012, up from $1.9 billion this year, according to eMarketer. Such spending will increase to almost $6 billion in 2015, eMarketer said. But as online video advertising grows, so, too, do the number of ad networks designed to distribute online video ads. Video embeds are fast becoming the norm among b-to-b media companies' online venues as well. Distributors offer media vehicles for both video display ads of the garden variety and online video advertising that is increasingly being categorized as “content” which could be defined as an ad package that runs throughout a TV show streamed via Hulu or other online video networks. From an ROI standpoint, it's problematic for marketers to get the total picture on how their online-video advertising is performing. Take InteractiveMedia: The online advertising network owned by Deutsche Telekom counts more 1,000 advertisers, such as Procter & Gamble Co. and Unilever, in its inventory. “Our most important problem was that we had to work with video ads and display ads separately,” said Guido Sachs, managing director-finance, IT and operations at InteractiveMedia. “We would have an integrated video and display campaign, but our campaign management had to handle it like it was separate campaigns.” The process led to delays in launching online video campaigns and incurring additional costs because InteractiveMedia would sometimes have to send the “creative” back to advertising agencies to tweak campaigns to ensure the technology aligned, Sachs said. However, InteractiveMedia has been able to jettison those problems since the company started using Adtech's online video product. In early September, Adtech debuted an expanded version of its online ad-serving platform that combines video and display units, reports and marketing campaigns. Rather than use an outside vendor, marketers can use the service to book their video campaigns within one interface and receive one measurement report, whereas previously separate display and video reports had to be combined subsequently. The new system is also VAST-compliant (Video Ad Serving Template) and has been designed to adapt to changes in market standards and guidelines. “It's been a much easier process,” Sach said, adding that in the last six months, online video advertising revenue has increased between 10% and 15%. “When you have a standard, it gives you more freedom to think about what makes [the online video ad] unique, because you don't have to worry about getting it to all of the different publishers.” Adtech served more than 4.5 billion video ads in February, up from 2 billion in September, according to Dirk Freytag, president of Adtech and head of AOL Advertising Technologies. Freytag said the recent changes in the ad platform enable marketers to view digital campaigns holistically. “Today, a lot of customers on the b-to-b side have three or four systems for doing digital marketing,” he said. “We want the campaign to have one destination, so the marketer has the overview of every interactive campaign—regardless of whether it's mobile or display.” (A few weeks after Adtech rolled out the changes in its ad platform, parent company AOL Inc. announced that it had acquired 5min Media, the Web's largest video syndication platform, for an undisclosed price.) Adtech's new ad platform provides consolidated reporting and includes more granular metrics, such as: How long was the user interacting with the video advertisement? Was there a mouse-over the video for that period of time? How long before the user clicked on the video? Did the user reopen the video? Adtech's upgrades “shows that one of the largest [ad] platforms is taking online video very seriously,” said Andres Palmiter, online video sales specialist at market research company comScore. He added that the platform now features “all the good things that online video brings to advertising—brand awareness, sight, sound and motion—combined with the display world.” Palmiter said that service will also relieve some of the pain for marketers that distribute online video ads via multiple ad networks. “Imagine five networks are selling inventory on the same platform,” he said. “Three are selling display and two are selling video; you don't want any conflicts of interest there. And when you unify an ad platform, you're taking that out of the equation.” In July, comScore upgraded its video measurement system to enable marketers to filter video-viewing activity between ads (including pre-, post- and mid-roll) and advertising content. “Online video is the red-headed stepchild of online advertising,” Palmiter said. “We're trying to pull money from TV dollars, and we're trying to pull money from display dollars. So any tool that helps marketers and planners, as well as big publishers, look at their display inventory and video inventory and treat them as one thing that they can funnel money into is really important.”
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